Essays on higher education and the housing market

authored by

Johannes Göhausen

supervised by

Stephan Lothar Thomsen

Abstract

Over the past decades, higher education has experienced tremendous growth around the world. Given the significant role of education, many governments pursue long-term strategies to strengthen their higher education systems, such as the Bologna Process. At the same time, changes in higher education have an inherent regional dimension and interact closely with labor and housing markets. This dissertation contributes to the understanding of how shifts and policies in the higher education system and the housing market (Bologna Process, higher education expansion, housing price boom) affect individuals' educational decisions and labor market outcomes. In particular, it focuses on the adjustments within regional higher education and housing markets. Chapter 2 reviews the empirical quantitative literature on the impact of the Bologna Process on outcomes along students’ trajectories (enrollment, study success, and labor market returns). We find that the literature is surprisingly small, selective, and ambiguous. While enrollment seems to have increased in countries implementing the reform more quickly, the evidence on study success is mixed. The results on employment outcomes are more consistent, with BA graduates having lower labor market returns than graduates with pre-reform or MA degrees. Altogether, studies often do not allow for causal conclusions, making evidence-based adjustments in reform implementation difficult. Chapter 3 evaluates the effects of the introduction of three-year undergraduate BA degrees in the course of the Bologna Process on the dual apprenticeship system in Germany, where three out of ten apprentices are qualified for university. We exploit regional and temporal variation in reform adoption, using administrative student and labor market data. The reform implementation reduced the number of new highly educated apprentices considerably. In particular, clerical apprenticeships were affected. Firms did not substitute with less-educated apprentices, but partly replaced the lower supply of new highly educated apprentices with university graduates in the long run. Chapter 4 examines the early career effects of entering the labor market during the recent higher education expansion in Germany. We use detailed individual-level data on employment biographies and exploit differential exposure of entry cohorts to the expansion over time and across regions. We find small negative effects on entry wages, driven by the high-skilled. With increasing experience, this effect diminishes and becomes slightly positive, with large positive spillover effects for low-skilled workers. The dynamics of the effects result from two countervailing mechanisms: supply effects (cohort crowding) and demand effects (skill- and routine-biased technological change). Chapter 5 investigates the role of regional supply and demand fundamentals in the German housing price boom between 2008 and 2021. Drawing on quality-adjusted housing price data at the district level, we show that regional fundamentals explain up to two-thirds of between-region and 77 to 87 percent of within-region variation in price growth. Price increases were mainly driven by co-movements in local demand fundamentals, notably population density and skill level. However, we further reveal systematic variation unrelated to fundamentals (overvaluation of top 7 cities, path dependency, and spatial spillovers), which we interpret as evidence of speculation, investor preference for liquid markets, and bounded rationality. Chapter 6 studies the effects of rental price changes on college enrollment rates. We exploit cross-district variation in the size and timing of local rental price booms in Germany during the 2010s. We find that an increase in apartment rents significantly reduced per-capita college enrollment, driven by first-year students moving long distances and being more pronounced in less densely populated locations. Housing costs - the largest component of students’ expenditures and an important location factor - have contributed to the slowdown in higher education expansion in some areas and reduced the skill-binding effect of universities there.

Organisation(s)

Institute of Economic Policy

Type

Doctoral thesis

No. of pages

304

Publication date

25.09.2024

Publication status

Published

Sustainable Development Goals

SDG 11 - Sustainable Cities and Communities

Electronic version(s)

https://doi.org/10.15488/17990 (Access: Open)